What's next for Lloyds Banking Group in 2023?

Twelve months ago, we launched our new strategy. 

Since setting out our three to five year plan for Lloyds Banking Group in February 2022, we’ve adapted to new challenges as rises in interest rates, inflation and the cost of living all continue to have a significant impact on the economy and our customers. 

Despite the uncertain economic environment, we’ve made good progress on what we set out to do. Today we published our financial results, reaffirming our commitment to our core purpose of helping Britain prosper by creating a more sustainable and inclusive future for people and businesses. 

When people ask me about the Group’s aims and ambitions, what immediately comes to mind is the ways we can make a positive impact on the lives of our customers. Being able to show how we’re shaping finance as a force for good needs to run through every decision we make. I’m proud of the work our colleagues have been doing this year to support communities across the UK. 

Support with cost of living

Providing a safe space, somewhere for our customers to turn to for advice, is more important than ever. 

We made easy to access assistance a key priority and expanded our specialist online customer support, with over 5,000 customers accessing our digital financial resilience tools every single day. Over 5 million customers have used our new credit scoring app, helping them to stay in more control of their finances.

Amidst growing uncertainty due to rising interest rates, we contacted more than 200,000 mortgage customers to offer expert support and guidance. 

We recognise that our customers and clients are dealing with different challenges, affecting their lives in different ways. This is why we made the first move and reached out to over 550,000 business customers in the sectors most impacted by the cost of living, like hospitality, to offer tailored assistance to help them get through the issues they were facing. In our position at the heart of the UK economy, we have a unique ability, and responsibility, to help our business customers navigate a challenging environment and increase their resilience. 

This was also front of mind for our own colleagues, and just as the cost of living challenge began to bite,  the Group made the decision to put a one off payment in the pockets of our colleagues last August – with a further payment for many colleagues in December, to help mitigate increased energy bills and other financial pressures. 

"We made easy to access assistance a key priority and expanded our specialist online customer support, with over 5,000 customers accessing our digital financial resilience tools every single day."

Improving access to quality housing

A home is more than just a roof over your head: having a home enables us to put down roots in a community. 

Access to secure and quality housing is becoming increasingly challenging. The Group has the ability to create change and increase access to safe, affordable homes. We want to champion the benefits of home ownership and help people access it through supporting a quality rental and social housing sector, and shared ownership. 

Last year, we delivered £2.1 billion of financing for social housing in the UK and we were able to help almost 64,000 first-time buyers move onto the property ladder, enabling them to have a place to call their own. 

Road to net zero

A sustainable and inclusive future for all means more has to be done to support the transition to a low carbon economy.  

In 2022, we were one of the first UK banks to make a public commitment to not directly finance new greenfield oil and gas developments approved after 2021. We know we have a leadership role to play among our industry, and wider UK business, if we want to achieve a sustainable and inclusive future for our customers and communities. Our ambitions are set out in our Group Climate Transition Plan, which we launched in 2022. Green transition financing is a critical part of the road to net zero, and we delivered £8 billion of sustainable financing to businesses last year alone. 

There are so many innovative and ground-breaking firms working on solutions to move our economy towards being more sustainable and I’m delighted that today we were able to announce the acquisition of Tusker, a company that provides EV and ultra-low emission vehicles via salary sacrifice schemes. It’s an exciting time as we bring the team on board to help support our ambitions to achieve net zero emissions targets by 2050 or sooner.

Customer relationships

Having strong relationships with our customers is paramount. We developed our new strategy in order to deepen customer relationships, whether with the 18-year-old opening their first Lloyds Bank current account, or a high street shop owner taking those first bold steps into business ownership. We want our customers and clients to feel secure and supported, whatever their goals. 

We’ve strengthened these relationships by broadening our product offerings and expanding in areas where we are underrepresented. We’ve grown our life and critical illness insurance market share and attracted £6 billion of net workplace pension flows, helping people save for retirement and have a more secure future.  

In our mass affluent business, we have increased banking balances by over 5%, ahead of the full launch of our differentiated, digital-first model later this year and, on the commercial side, we’ve seen strong growth in several areas of the business, including more than 20% increase in new merchant services clients. It’s always brilliant to see our business grow, but to be truly successful we recognise that a better future for people across the UK has to be at the heart of everything we do. We’ll continue to be there for our customers and clients, whatever they may be facing.
 

Looking ahead

One year ago, we reaffirmed our Purpose: Helping Britain Prosper. Against a backdrop of economic uncertainty and cost of living challenges, it has never been more important to create a more sustainable and inclusive future for people and businesses; shaping finance as a force for good.

Charlie